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Agent disclosure has been an ongoing problem in real estate transactions probably since the the first real estate agent helped broker a transaction. Now, with a more complicated landscape for real estate purchases and sales it is more important for the agents involved to disclose in writing their roles before the process begins.

When we bought our first house, the buyers agent came by the house a week afterwards with a post dated buyers agreement for us to sign. As a person who tends to read things, I was a bit amused that even though she performed the role correctly, we never had an understanding of how complex and specific her duties were.

Fortunately we were not hurt, and as time went along I learned about agency and what is required so when we presented an offer on our next house, we knew how to deal with the sellers agent. Not contentiously, but recognizing that by law he was not on our side, and we needed to be observant as the process went on. The other agent was so good and forthright that when it came time to sell our house, we used them.

The Washington Post has a good article for the average homebuyer on how agency and representation works and some of the pitfalls on failure to disclose by real estate agents.

According to new research by the National Association of Realtors, just 30 percent of all buyers in 2005 received disclosures about representation from their agents at their first meeting. Nearly half of all first-time buyers either received no disclosures during the sales transaction or were unaware of whether they did or did not.

Most states require real estate agents to inform potential sellers or buyers in writing about who will be representing whom. Agents frequently represent the property seller exclusively. But under “buyer agent” arrangements, they may represent the purchaser exclusively.

Clarity about representation is crucial because sellers and buyers often divulge confidential information to agents about their finances, personal circumstances or bargaining strategies that can dramatically affect pricing and negotiations. If a buyer mistakenly confides key personal or tactical information to an agent representing the seller, that agent is highly likely to pass it along for the advantage of the seller.

When agents fail to provide the written disclosures mandated by most states, clients may be misled into paying too much, forgoing contractual protections such as contingency clauses, and generally ending up dissatisfied with the outcome of the transaction. Some buyers or sellers end up angry enough to sue.

Read the Rest at the Washington Post.

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